If there’s one thing property managers don’t take for granted these days, it’s a good tenant. They might as well be sitting at the end of a rainbow, because commercial real estate professionals treasure them. Bad tenants, on the other hand, can be a major headache and cause tremendous damage to your portfolio’s future prospects.
The tenant’s actual business model is one huge factor as to whether they will be a “good” tenant or not. Is it sound? Does it have a long-term outlook in place? Whether the tenant’s business is sustainable or not can dictate whether they’ll be able to pay their rent for the duration of their lease. It’s on you as the CRE pro to decide whether you trust the sustainability of that business’ model enough to give them a space.
This is particularly true when it comes to deciding on franchise vs. chain models. Does either have any effect on property managers and other commercial real estate professionals? Let’s take a look.